Nokia Drops Phone Prices, Puts The Squeeze On Competitors

Nokia has an empowering, vice-like grip on 40% of the world market for mobile phones. Even with its market-leading position, it is stepping up the pressure on its rivals, and recently cut the cost of many of its phones by about 10%. Is this the first sign of a price war?

Nokia has an empowering, vice-like grip on 40% of the world market for mobile phones. Even with its market-leading position, it is stepping up the pressure on its rivals, and recently cut the cost of many of its phones by about 10%. Is this the first sign of a price war?Quarterly reports for the mobile phone manufacturers have been rolling in over the last couple of weeks. Nokia's were as strong as ever. The Finnish company has maintained a stranglehold on 40% of the market for all of 2008 so far. That has to be a good feeling.

Nokia doesn't seem concerned about its margins, though, and, according to Reuters, has slashed the price of many of its models by an average fo 10%. Some of the models seeing price drops are the 5310, 5610 and N81, all of which are multimedia, music-focused phones that compete head-to-head with Sony Ericsson's Walkman lineup.

Of course, Nokia officially declined to comment on any change in its pricing policies. I will say this, however: Nokia phones are expensive as heck, so price cuts are welcome. The E71, for example, which just went on sale here in the U.S., costs about $500 unlocked. The N95 cost $750 when it was first released, and, nearly 18 months later, still commands more than $550 at retail.

Whether or not this is an attempt by Nokia to maintain sales volumes in a turbulent market or just a simple price drop, it could spur others to follow suit. A price war is something that might be good for consumers right now, but it could be devastating to the phone manufacturers.

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